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China Readings for November 12th

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Bohai oil spills ConocoPhillips’ fault: authorities- BEIJING, Nov. 11 (Xinhua) — China’s State Oceanic Administration (SOA) said Friday that spills at an oilfield operated by ConocoPhillips in the Bohai Bay resulted from defects in the company’s production and management.ConocoPhillips had violated the original protocol of exploitation and failed to take necessary precautions when there were high risk of a spill, said a statement from the SOA, which has been investigating the cause of the accident since soon after it happened in early June.

SEC, NASDAQ, NYSE Finally Do, Er, “Something” To Combat Reverse Merger Abuse… | ZeroHedge – it is little if any surprise that when it came time do something about the fantastic frequency and magnitude of fraud in the (largely Chinese) reverse-merger industry, the “fix” the SEC and the exchanges have come up with to stem RM market abuse really isn’t a fix at all. Rather, the “solution” to the problem is simply to put a speed bump or two on the road to U.S. reverse-merger listing:

The Jamestown Foundation: Bo Xilai’s Campaign for the Standing Committee and the Future of Chinese Politicking- For China watchers, it is exhilarating to see what usually happens behind the high walls of Zhongnanhai come out in the open. Every developing and developed nation has to balance development with social justice, and China is no exception. To have vigorous debate among decision makers on this issue is necessary and to take it to the people in the style of a political campaign is a must in any open society. Bo Xilai and Wang Yang deserve credit for taking their policy differences seriously and appealing to the people for support.If China’s leadership change is subject to popularity test, Bo may easily win the contest as he is more populist, charismatic and skillful. Popularity, however, does not always imply rationality or sustainability. To many, Bo’s Chongqing Model is not sustainable, and it reminds many of the CCP’s governing at its worst: manipulation of the rule of law and the embrace of a rigid ideology. What sets Chongqing apart from Mao’s China, however, is its relentless quest for Western technology, capital and business, which all requires a real market economy supported by rule of law and open flow of information. It remains to be seen whether Bo is serious about his tactic in Chongqing and is determined to replicate it nationwide—if given the platform—or if he simply is using the Chongqing Model as the springboard for his ambition.

China’s chequebook diplomacy runs deep in the Pacific – Telegraph – The opening of a Chinese embassy in the Maldives in the Indian Ocean fits into a long-established pattern by Beijing of pursuing better relations with small island nations in the Pacific Ocean in a bid to win support at the United Nations vis a vis Taiwan, and as a bulwark against American influence.

Exclusive: Politics stymie China’s EU aid offer: sources – Yahoo! News – Diplomatic deadlock is curbing China’s will to provide cash to help end the euro zone crisis after Europe spurned the simplest of Beijing’s three key demands, two independent sources have told Reuters.
China had offered help in return for European support to grant it either more influence at the International Monetary Fund, market economy status in the World Trade Organization, or the lifting of a European arms embargo, said the sources, both of whom have direct knowledge of the matter, including one who has ties to the leadership in Beijing.

Should We Sell Taiwan? « Patrick Chovanec- The critical point is, the $3.2 trillion FX reserves held by the PBOC (in the form of Treasuries, etc.) represent money that is already in the Chinese economy, in the form of yuan. There are already domestic claims on those assets; they cannot be “given away” or spent by the PBOC without receiving other assets of equivalent value in return, or incurring a loss that would have to be plugged by Chinese government’s own fiscal resources (taxes or government borrowing).A Chinese decision to ”forgive” the U.S. Treasuries it holds as part of its FX reserves, in exchange for the U.S. abandoning its defense commitments to Taiwan, would render the PBOC hopelessly bankrupt. The central bank would lose RMB 7.2 trillion worth of assets, against only RMB 22 billion in capital, leaving a massive hole in its balance sheet. That, in turn, would hopelessly bankrupt the entire Chinese banking system, wiping out nearly half of the RMB 16 trillion cash reserve deposits they hold at the central bank (which are essentially claims on its FX reserve assets), against just RMB 2.8 trillion in paid-in capital standing behind the entire system.

Is This NYT Op-Ed a Joke? Selling Taiwan to the Bankers of Beijing – James Fallows – International – The Atlantic – My first reaction to today’s op-ed in the NYT was that it was some kind of put-on. America owes China a lot of money; officials in Beijing are always mad at officials in Washington for selling weapons to Taiwan. Presto! Let’s solve both problems at once, writing off the debt in exchange for writing off Taiwan. I kept waiting for the “but seriously now…” transition to a real proposal, or the paragraph saying, “Obviously this would be crazy, yet it underscores…” But apparently the author, Paul V. Kane, identified as a Marine Corps veteran of Iraq and a former fellow at the Kennedy School at Harvard, really means it.

China Adds a Spyglass in Space, Hints at More to Come – China Real Time Report – WSJ- Yet it is perhaps too easy to be starstruck by China’s achievements in space. Cliff warns that although China has passed some impressive milestones, its limitations must be kept in perspective. He points out that China’s satellite programs seem to have hit road bumps in several areas, including radar satellites that have failed in orbit or have been repeatedly delayed.“We shouldn’t make Chinese technological capabilities out to be ten feet tall,” he says. “The things that they are doing are not cutting edge in the first place and they’re not always going smoothly either.”

Review & Outlook: Why China Is Unhappy – WSJ.com- The government response to all this unhappiness has been to increase the resources and powers of the domestic security apparatus. This year the budget for security surpassed that of the military for the first time, and disappearances of dissidents have become commonplace. Instead of cowing the population, this is only creating more instances of official abuse that are publicized on the Internet, leading to greater anger and defiance.Alarm bells should be ringing. The virtuous cycle of social stability and material progress that has persisted for two decades has gone into reverse. This need not lead to disaster, as long as the Communist Party recognizes its mistakes and responds to the public desire for the rule of law and curbs on the power of the state. Otherwise there is more unhappiness ahead.

人民邮电报驳斥央视电信联通垄断报道-《财经网》 – telecom newspaper vs cctv over unicom-telecom investigation. lots of competing interests. timing politically suspicious given who has the most interest in the telecom industry
文章称，央视报道认定中国电信和中国联通在带宽专线接入上处于市场垄断地位的结论无数据支撑，因此并不成立

Guangdong’s Recipe for Happiness: Fewer People, More Sex – China Real Time Report – WSJ- The bedroom has become the latest target in a campaign to make “happiness” keep up with unbridled economic growth in the southern Chinese province of Guangdong, with a senior local official pledging to improve the sex lives of singletons.“There will not be a happy Guangdong without local residents having happy sex lives,” the state-run China Daily quoted Zhang Feng, deputy secretary-general of the Guangdong provincial government, as saying on the eve of national Singles Day on Friday (so designated because the date is 11/11/11).

China’s PLA Involved in Cyber Espionage: Report – Defense News- TAIPEI – For the first time, a new report details China’s signals intelligence (SIGINT) organization, including what role the People’s Liberation Army (PLA) has in cyber intelligence collection.The report, “The Chinese People’s Liberation Army Signal Intelligence and Cyber Reconnaissance Infrastructure,” by Mark Stokes and Jenny Lin of the Project 2049 Institute, Arlington, Va., provides the first overview of the PLA General Staff Department’s Third Department, China’s premier cryptologic service responsible for signals and cyber intelligence collection.The Third Department is comparable to the U.S. National Security Agency and appears to be diversifying its traditional SIGINT mission to include cyber surveillance, also known as computer network exploitation (CNE), the report said.

INSIGHT-China’s cash for commods gamble heightens property threat | Energy & Oil | Reuters- SHANGHAI, Nov 11 (Reuters) – Sitting in China’s copper and steel warehouses is a hidden risk to the world’s second-largest economy — banks’ indirect exposure to a property market that is showing signs of stress.Since late 2010, Chinese entrepreneurs and state firms have used trade loans to import goods such as copper and soybeans, which they have then quickly sold or used as collateral for further loans, skirting government credit curbs.Many lent that cash in informal markets, earning as much as 70 percent interest — a nice return given that bank fees and commissions on letters of credit (LC) can be as low as 3 percent for established companies, and allow payment some six months down the line.

March of the Freshmen – By Eric Fish | Foreign Policy – every school year has begun with the training. Participation is mandatory for every incoming freshman — young men and women alike — and a poor performance can blot a record that stays with them throughout their professional lives. Over a speaker at the Tsinghua stadium, an announcer says that military training is “one of the holiest tasks given by the People’s Republic of China.”

China to widen air monitor scope- Zhang Lijun, vice-minister of environmental protection, said that Chinese cities are facing severe air pollution.He admitted that the existing air appraisal system has defects.”Compared to the WHO guidelines, China’s air quality standards are rather lax, and evaluation factors are still limited,” he told a Sino-US conference on regional air quality, held in Beijing on Thursday.Under discussion are a new set of air evaluation standards, which are likely to include readings of PM2.5, and opinions will start to be solicited soon, said Hao.

To Save Our Economy, Ditch Taiwan – NYTimes.com- dumb on many levels, starting with fact the PRC sees Taiwan as theirs and will not negotiate for it. Imagine how Chinese would think if the government write of the 1T+ of US debt in exchange for this proposed deal? Government would look beyond impotent..probably worth a blog postThere are dozens of initiatives President Obama could undertake to strengthen our economic security. Here is one: He should enter into closed-door negotiations with Chinese leaders to write off the $1.14 trillion of American debt currently held by China in exchange for a deal to end American military assistance and arms sales to Taiwan and terminate the current United States-Taiwan defense arrangement by 2015.

China’s ‘Breathable’ Pollution Breaks Index – Bloomberg – The Chinese and Americans are in fact using different measures, which is one source of conflict. Beijing’s pollution monitors particles 10 micrometers in diameter or smaller. The embassy’s rooftop monitor, made by Met One Instruments Inc. of Grants Pass, Oregon, measures pollutants smaller than 2.5 micrometers. The finer particles can reach deeper into the lungs and are more dangerous to human health, according to the World Health Organization.
Met One Instruments senses an opportunity, and, with an office in Shanghai, is prepared. Jo Ann Pottberg, director of global sales and marketing, said in an e-mail that she’s optimistic that China will adopt the standard measured at the embassy with the company’s BAM 1020 FEM 2.5 monitor. Once the authorities require systems with similar specs, “they will have a better handle on the pollution monitoring in their area,” Pottberg said.

Oil Riches Languish on China Doorstep – Bloomberg – To China, the world’s biggest energy consumer, another Saudi Arabia of oil may lie beneath the ocean to its south. Escalating regional tensions mean large-scale drilling may be slipping further into the future.
The South China Sea area may hold 213 billion barrels of oil, or 80 percent of Saudi Arabia’s reserves, according to Chinese studies cited in 2008 by the U.S. Energy Information Agency. The world’s second-largest economy claims “indisputable sovereignty” over most of the sea, including blocks off Vietnam that Exxon Mobil Corp. (XOM) and Russia’s Gazprom OAO (GAZP) are exploring.

Letter from China: China to Romney: Et Tu, Mitt? : The New Yorker – In a race in which no candidate can afford to lose anybody on the margins, China is a pain-free target. But the dividends are temporary; every U.S. President since Nixon has found governing the relationship with China to be less suited to poetry. In 2008, candidate Obama told New Hampshire voters that he might “stop all imports of these toys from China,” which he later amended: “Now don’t get me wrong, as President I will work with China to keep harmful toys off our shelves…”

Maker of Mao’s Liquor Overpowers With TV Buys – Bloomberg – China Kweichow Moutai Distillery Co., maker of the 106-proof liquor that Mao Zedong’s Red Army used to disinfect wounds, bid more than $13,500 for each second of airtime to advertise on China’s state broadcaster.
The company that controls the world’s second-biggest distiller by market value bid the most among alcoholic beverage makers to advertise on China Central Television. The industry group increased its share of spending, eclipsing banks and consumer goods makers such as Procter & Gamble Co. (PG)

Remember the “borderless” Internet? It’s officially dead- SOPA would write these de facto borders right into US law, setting up two classes on online entities. Right up front, the bill defines terms like “Domestic Internet Protocol Address” and “Foreign Internet Site.” The concepts are messy if you think about geography, because a site in Spain can register a .com domain name with a US registrar and be considered “domestic.”But they make much more sense when you think of the concepts as pertaining to power, not location. The bill doesn’t care if a domain name or an IP address actually resolves to somewhere in the US; it simply relies on the location of the (easy-to-lean-on) registrar or Internet provider to make its determinations.The trends have been present for years, but if SOPA passes, it will make them explicit: the chaotic, unfilterable, borderless Internet of the 1990s is truly dead, replaced by an Internet of order, filtered connections, and national borders.

Four Chinese army deserters lead authorities on tragic manhunt – latimes.com- The motives have not been disclosed, but it appears that Yang was the instigator; he was the oldest, the others being 18 and 19 years old.An activist blogging about the incident suggested that Yang’s family faced eviction from their home and that he was bent on revenge. There were also hints of romantic problems. Exactly one year earlier, he had posted on a Facebook-style chat site a poem lamenting the difficulty of having a relationship while in the military.

Analysts See Biggest Gain in China Property as Shorts Increase – Businessweek- Analysts’ forecasts show real-estate stocks will rally more than any other industry in China during the next year, even as wagers on declines climb to the highest level since at least 2008.Developers in the MSCI China Index will surge 46 percent on average by November 2012, the most among 21 groups in the equity gauge, based on analysts’ estimates compiled by Bloomberg. At the same time, bearish bets on property companies have doubled to 12 percent of shares available for trading this year, according to Data Explorers, a London-based research firm.

腾讯明年投10亿发力搜索_互联网_科技时代_新浪网 – tencent has spent 1.2B rmb so far developing search engine, will spend 1B more in next year. $bidu